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eBay 101: Starting a Home-Based Business Selling on eBay

Selling on eBay is an adventure. You can make it into a career, a part-time job, or a hobby. In this article, I will discuss my history with eBay and how it has changed over the years. I will also walk you through the steps necessary to sell a particular item on eBay, and I will show you ways that you can find a niche and begin your own eBay business.

I started selling on eBay almost 12 years ago and have seen many changes over the years. In the beginning, selling on eBay was a necessity for me and my family. My husband and I were newly married and had two children within 23 short months. We were faced with providing for our growing family on one income, since I did not want to return to my job as a research engineer. We started cutting corners wherever we could, from shopping the sales at all grocery stores to turning down the thermostat. I picked up baby clothes and toys at garage sales to save even more. Since my mother had an antique store when I was younger, I have some knowledge of antiques and would see them often at garage sales for very low prices. My mother encouraged me to buy them and take them to antique stores to re-sell, but this was a lot of work and the stores did not often pay well. She then recommended I try eBay.

I listed my first item almost 12 years ago. I still remember the white Beanie Baby bear I purchased for $ 2 at a garage sale and put up in my first auction. Seven days later, it sold for $ 153 and I was elated. I had found a way to supplement our family income while at the same time staying home to care for our children!

In the beginning, the antiques and collectibles sold very well. In a good year, I made $ 15k selling on eBay. Their fee structure was different and the economy was thriving, so making a profit was much easier than it is today. Every year, we use the money I make on eBay for our family vacation. We have also used it for large-scale home improvement projects and the purchase of new cars.

eBay has seen dramatic changes over the years. There are many rules and restrictions in place now that make it challenging for small-time sellers like myself. Any package lost by the post office is now the responsibility of the seller, and we are no longer able to offer shipping insurance to our customers. As eBay has become more profitable, more and more companies have created eBay stores in order to sell their merchandise. There are literally millions of listings!

Yet people continue to bid on my auctions and I continue to make a profit. It is an extremely flexible way to make money while at the same time being home to care for your children. One of the benefits is the ability to set your own hours and decide on your own pace. Our family has grown to include five children now, and I've chosen to take a leave from eBay after the birth of each child. I took just a few weeks after the birth of our third child, since we were not as financially comfortable as we are now. When my fifth child was born, I took a 6-month leave from selling on eBay. There are a few other jobs that allow you the flexibility to make those kinds of decisions with virtually no penalties (except the lack of income!).

So let's assume you have an item that you want to sell on eBay. The very first step is to find out if it's worth selling. In order to find out, you will need to have an account (they're free to set up). Enter the name of your item in the search box and take a look at the auctions that come up. Some of them may have bidders, sometimes none of them do. This page does not give you complete information about the way your item will sell, since many of the hot auction items will not go up in price until the last few minutes of the auction. Now go to the left side of the page and click on "completed listings." You will see a new set of auction listings, all of which have been completed. You can now get a sense of how well your item is selling, and what price it is selling for.

Once you know the selling price, you can estimate your final profit. Is the item something you found in your house that you were going to get rid of anyway? Then your profit is the final selling price minus the fees. Is the item something that you purchased for the sole intent of re-selling? Then you need to take the final selling price, subtract the fees, but also the purchase price. Whatever is left is your profit, and only you can determine if the work ahead of you is worth that amount of money. If you're going to accept Paypal for payment (and almost ALL sellers do), you can count on the total fees being somewhere near 15% of the selling price. This includes the insertion fee, the final value fee (which is based on a sliding scale), and the paypal fees. Some sellers try to re-coupon this fee by charging a large handling fee, but that practice is discouraged by eBay (and I agree).

So now you have an item that you want to sell and you've decided that you will make a profit on it …. what's next? You need to get a picture of the item to show your bidders what they will be getting. You will need either a digital camera or a phone with a camera to do this. Take a few pictures, upload them, and edit them to best show off your item. Is one picture sufficient or will your item require multiple pictures to best show it off? If you need multiple pictures, you can load them separately onto eBay (only the first picture is free) or edit multiple views of the same object into one picture. I do this with Microsoft Image Composer, but there are several programs out there that can do this kind of task. eBay is becoming more controlling of the pictures on their auctions, I believe in order to reduce storage requirements on their systems. It is important that your pictures are crisp, clear, and colorful, so do your best with them. A picture really is worth a thousand words!

The picture is complete and now you need to start the auction. There are several ways to do this. I use Turbo Lister, a program provided free of charge by eBay for medium to high volume sellers (or us busy moms!). It allows me to maintain a template I can change with each listing. The inputs are simple and I can do the work off-line. I put my auctions together during the week and then upload them all at one time using Turbo. This is a great convenience! If you're not going to use Turbo, you will have to enter the information for your item manually through the "sell your item" page on ebay.

There are so many choices to make! First, come up with a title for your auction. Include as many keywords as possible that a buyer might search on. You then need to select a category – look at the category of similar items that have sold, and put it in the most popular category. Now write a description. Be as detailed as you can. Make sure you include information about defects, cracks, repairs, holes, or any other detail about the item's condition. If you're selling clothing, list the size but also use a tape measure to make exact measurements (some sizes vary by manufacturer).

Then you will have to decide what style auction you want. Most auction-style listings are 7-day auctions with no Buy-It-Now. You have the choice of adding the Buy-It-Now option, but it costs extra. If you want your bidders to have the ability to buy your item out-right, you need to decide the price that you will be happy with. You can do a straight Buy It Now listing (no auction), an auction in combination with a Buy It Now (buyers can start bidding at a price lower than the BIN, but if someone comes onto the scene and is willing to pay the BIN price, the item is theirs for that price), or a straight auction with no BIN. You also need to set a starting bid for your item. Some sellers start all their auctions at99 and let them ride, but it's helpful to think about the lowest price that you would accept for the item you are selling. I usually start my auctions at $ 9.99, but I've been at this for many years and am experienced in auction trends. Start careful until you are sure about what you are doing! There's nothing more frustrating than having an item sell for much lower than it was worth – and this has happened to me numerous times! The other side of the coin is the items that sell for more more than you expected, and I figure they balance each other out.

Now you need to make some decision about shipping. First, figure out how you will ship your item. Will it fit in a bubble envelope or do you need a box? I've had great success in getting free boxes from grocery stores. Find the right box for your item, and weigh the item with the box. You'll need to input the weight into eBay so they can compute shipping charges. I usually ship breakable items Priority and non-breakables Parcel Post (packages that are shipped Priority are handled much more gently). If you are shipping books, CDs, or DVDs, you can ship them media mail. It takes longer but is extremely inexpensive! Just make sure there are no advertisements in your media mail items, as anything with an invalid your item from media mail shipment. Items under 12 oz can ship First Class. Now you can decide if you want to include a handling fee. I always include a $ 1.70 handling fee when I am shipping an expensive or breakable item – this is the cost of USPS insurance for items up to $ 50. I figure if I sell something for more than $ 50, I will pay for the extra insurance myself since the item did so well! Insurance up to $ 200 is $ 2.10, and there is a sliding scale for more expensive items. Just make sure you do not use the word "insurance" in your auction – eBay will not allow it!

Now you have to decide if you will ship your package overseas. I usually allow this, but I charge a sliding scale handling fee based on what I think the shipping fees will be. There are some fees (Paypal) that are calculated based on the total payment, so if it costs $ 50 to ship that package to Germany, you will see much higher fees because of the high cost of shipping. My average international shipping fee is $ 5.00, because not only do I get charged higher fees based on shipping, I also have to fill out customs forms at the post office and wait longer while the clerk processes the item. To me, my time is worth money and I charge accordingly. I am up-front about the charges in my listings so my international bidders can decide if the shipping fee is something they are comfortable with.

There are other options you can add to you auction listing, but they will cost you. eBay has a good tutorial about the selling options on it's website. I rarely (if ever) pay more for these services.

Now your auction is up! Sit back and watch it for the next 7 days. Do not be surprised if there are few or no bids on your item until even a few hours before the end of the auction!

Your auction is over and your item sold. Now what? Go to your "my eBay" page and click on "sold" items on the left side of the page. You should see a detailed account of everything that you have sold. Click on the "send invoice" button and send your buyers an invoice. Wait for payment. When the buyer pays, you will receive notification from paypal. I always send a courtesy email to the bidder to let them know that payment has been received, and to let them know when their package will ship. I usually ship within 24 hrs of end of auction, and after the package is shipped I send another email to notify the buyer that their package is on it's way.

That's it! You've just completed your first sale on eBay! All that's left now is feedback, a system where you can rate the buyer and the buyer can rate the seller. Having high feedback marks is important – it's often how a buyer determines if they want to purchase from you. It is important that the item description is correct, that you ship in a timely manner, that your shipping charges are not too high, and that you have good communication with your buyer. One bad feedback rating affects your overall score. A good score can lead to seller fee discounts, increased sales, and a better sense of satisfaction for a job well done!

So how do you go about finding an item to sell? If you're getting rid of the clutter in your house, sell what you have. If you want to turn this into a business, you'll need to pick a product. The best way to see what is selling on eBay is to go to pulse.eBay.com This site will show you the items that are most often searched for on eBay. The ten most popular terms will come up on the first page, but if you want to narrow your search, select a sub-category in the pull-down menu above. For example, if you select Health and Beauty you will the top three search items are: 1. Mac, 2. Philosophy, and 3. Victoria Secret. These are the items in Health and Beauty that people are most after! So if you want to develop a business, you can contact those companies and see if they are looking for sellers, or you can try to find wholesale lots of those products to re-sell. For example, I just searched on Victoria Secret and the number 1 item is an auction for 500 bras selling for $ 9,995. Now do some research and decide if you could make a profit purchasing that lot, breaking it up, and selling the bras individually.

My personal recommendation is to sell what you love. After all, you will be handling the merchandise so it might as well make you smile! Best of luck, have fun, and happy selling!